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Loan Calculator

Calculate monthly loan payments, total interest, and view a full amortization schedule for any loan amount.

Calculation Inputs

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Monthly Payment

$191.01

Total Interest

$1,460.7

Total Cost

$11,460.7

Principal

$10,000

100% Client-SidePrivate & Secure

Amortization Schedule (key payments)

#PaymentPrincipalInterestBalance
1$191.01$145.18$45.83$9,854.82
12$191.01$152.67$38.34$8,213.27
24$191.01$161.28$29.73$6,325.75
36$191.01$170.38$20.63$4,331.76
48$191.01$179.99$11.02$2,225.29
60$191.01$190.14$0.87$0

How to Use the Loan Calculator

  1. 1

    Enter the total loan amount in dollars.

  2. 2

    Enter the annual interest rate (e.g., 5.5 for 5.5%).

  3. 3

    Set the loan term and select whether it is in years or months.

  4. 4

    See your monthly payment, total interest, total cost, and a full amortization schedule.

Formula & Mathematical Basis

M = P × [r(1+r)^n] ÷ [(1+r)^n − 1] Total Interest = (M × n) − P

Variable Key

M

Monthly payment amount in dollars

P

Principal — the original loan amount

r

Monthly interest rate = Annual Rate ÷ 12 ÷ 100

n

Total number of monthly payments (term in months)

📝 This is the standard fixed-rate fully-amortising loan formula. Each payment covers the interest accrued on the outstanding balance first; the remainder reduces principal. At 0% interest, the formula degenerates to M = P ÷ n.

Step-by-Step Examples

1

Auto loan — $25,000 over 5 years at 6.9%

Scenario: $25,000 car loan, 6.9% APR, 60-month term.

  1. 1.Monthly rate r = 6.9% ÷ 12 ÷ 100 = 0.00575.
  2. 2.n = 60 payments.
  3. 3.M = 25,000 × [0.00575 × (1.00575)^60] ÷ [(1.00575)^60 − 1].
  4. 4.(1.00575)^60 ≈ 1.4106.
  5. 5.M = 25,000 × (0.00575 × 1.4106) ÷ (1.4106 − 1) = 25,000 × 0.00811 ÷ 0.4106 ≈ $494.
✅ Monthly payment: ~$494 | Total interest paid: ~$4,640 | Total cost: ~$29,640
2

Personal loan — $10,000 over 3 years at 12%

Scenario: $10,000 personal loan, 12% APR, 36-month term.

  1. 1.r = 12 ÷ 12 ÷ 100 = 0.01.
  2. 2.M = 10,000 × [0.01 × (1.01)^36] ÷ [(1.01)^36 − 1].
  3. 3.(1.01)^36 ≈ 1.4308.
  4. 4.M ≈ 10,000 × 0.014308 ÷ 0.4308 ≈ $332.
✅ Monthly payment: ~$332 | Total interest: ~$1,955 | Total cost: ~$11,955

Practical Use Cases

  • Comparing multiple loan offers side-by-side to find the lowest total cost
  • Budgeting monthly cash flow before taking on new debt
  • Calculating the true cost of financing a car vs paying cash
  • Modelling the impact of extra principal payments on payoff date
  • Business loan planning for equipment financing
  • Student loan repayment scenario analysis

Common Mistakes to Avoid

  • Confusing APR (Annual Percentage Rate) with nominal interest rate — APR includes fees; some lenders advertise one and use the other.
  • Ignoring origination fees, prepayment penalties, and other costs that increase effective loan cost.
  • Using annual rate directly in the formula instead of the monthly rate (annual ÷ 12).
  • Assuming every extra payment reduces the balance — confirm with lender that prepayments apply to principal, not future interest.

Glossary of Terms

Amortisation
The process of gradually reducing a loan balance through regular payments that cover both accrued interest and principal.
Principal
The original outstanding loan balance, excluding interest.
APR (Annual Percentage Rate)
The yearly cost of a loan expressed as a percentage, including interest and required fees, enabling apples-to-apples comparison between lenders.
Amortisation Schedule
A table showing each payment's breakdown into principal and interest, plus the remaining balance after each payment.
Prepayment Penalty
A fee charged by some lenders if the borrower pays off the loan early, compensating the lender for lost interest income.

Frequently Asked Questions

How is the monthly loan payment calculated?

▾
Monthly payment = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the number of payments. For 0% interest, it is simply P ÷ n.

What is an amortization schedule?

▾
An amortization schedule shows how each payment is split between principal and interest over the life of the loan. Early payments go mostly to interest; later payments go mostly to principal.

How can I reduce total interest paid?

▾
Making extra principal payments early in the loan, choosing a shorter term, or refinancing at a lower rate are the most effective ways to reduce total interest.

Does this calculator work for auto loans and personal loans?

▾
Yes. This calculator works for any fixed-rate, fixed-term loan including auto loans, personal loans, student loans, and business loans.

Sources & References

  1. [1]
    Calculating Loan Payments— Consumer Financial Protection Bureau (CFPB), 2023
  2. [2]

CalculatorFree Finance TeamCertified Financial Analyst Review Board

Formula and outputs verified against CFPB loan calculation standards and Federal Reserve guidelines.

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